Punjab’s Groundwater And Brexit: An International Answer To A Local Situation

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Punjab: The Breadbasket Of India

Punjab has 83% of its geographic area under cultivation which is the highest in India. Several problems mire agriculture in Punjab, but the primary issue is the scarcity of water resources compounded by over-utilisation of groundwater. The national plan for Green Revolution required Punjab to cultivate food grain crops, particularly wheat and paddy. These crops, which now cover 83.85% of the cropped area of the state, require water-intensive agrarian practices resulting in a decline of groundwater tables throughout Punjab. According to NITI Aayog’s Composite Water Management Index, Punjab has mismanaged its water despite scarcity.

Groundwater Situation in Punjab. The area marked red has seen the maximum decline of groundwater.
This map shows the groundwater situation in Punjab. The area marked red has seen the maximum decline of groundwater.

Of Punjab’s 22 districts, 12 have witnessed a fall of groundwater level beyond 25 meters. As of today, Punjab has fully exploited its irrigation potential and cropping intensity which has resulted in the state’s agricultural productivity to reach a saturation point.

Almost 99% of the total cultivable land in Punjab is under cultivation. As new land is not available, the only way out for Punjab is crop diversification. To save the state’s groundwater, vegetables offer a possible substitute to wheat and paddy.

What Is Brexit And Why Is It Important For Punjab?

In June 2016, the UK government conducted a referendum in which 51.9% of the people voted to leave the European Union (EU). The term “Brexit” refers to the withdrawal of the UK from the European Union. The deadline for the withdrawal has been extended twice before, and the latest deadline was October 31, 2019. Recently, the UK Parliament voted for delaying the deadline further. The EU agreed to extend the deadline till January 31, 2020, for the UK to exit the economic union.

There is a substantial political capital invested in negotiating a divorce deal between the EU and the UK. UK requires a ‘transition period’ in which the country will be out of the EU while being in the process of negotiating future standards of interaction with the EU. This ‘transition period’ is essentially a stage after Brexit happens. If the UK is unable to get satisfactory agreements from the EU in the ‘transition period’ then the nation will head for a situation called a “hard Brexit” or a “No Deal”. But if the EU accepts UK’s terms, then the world will witness a “soft Brexit” which will be less damaging to the economies in Europe.

In a “No Deal” scenario, the UK will abolish the preferential treatment of imports from EU and will treat the European imports at par with the rest of the world, under the World Trade Organisation (WTO) rules. The UK’s domestic political quagmire has resulted in an early general election on 12th December. Britain hasn’t held an election in December since 1923. This shows the urgency to realise Brexit, but the fears of a “No-Deal” has resulted in political uncertainty within the UK.

While Brexit directly impacts Europe, its tremors might be felt in Punjab. These should be the tremors of an epiphany. European and African nations have dominated the British food supply chains. Under a “No Deal” scenario, Britain will face a sudden shock in the supply of cheap vegetables and fruits. The UK government amplified its preparations for a no-deal Brexit, collectively known as Operation Yellowhammer. An internal report relating to this operation was released which warned of interruptions to the supply of fresh food, fuel, and medicine, as well as potential job losses, nursing-home closures, and clashes between fishing boats at sea.

According to the UK Trade Policy Observatory, fruits and vegetable prices in the UK could inflate by up to 18%. Such a rise in prices will lead to a shift in consumption patterns of UK residents. Britain will have to look towards newer markets for cheaper imports. The markets which the UK had ignored earlier due to the easy supply from EU now stand a fair chance to compete with vegetable exports from the EU. African countries like Kenya, Tanzania, etc., already have strong horticulture export supply chains with the UK.

Punjab, one the other side, has been a minor exporter to the UK in the category of processed and fresh vegetables and fruits. Punjab was exporting up to 2000 tonnes of vegetables annually to the UK from 2007 till 2014. This export of vegetables had encouraged vegetable growers to sow more vegetables instead of water-intensive crops like paddy and wheat. This export, when compared to the global value of exports, is minuscule at best. Brexit provides an opportunity to a state like Punjab to change its cropping pattern by bringing more land under vegetable cultivation. But such an admonition will not hold water unless backed by facts.

Is Punjab’s Produce Competent Enough?

Countries of Europe, including the UK, have been known to impose stringent hygiene standards on vegetables imported by them. Punjab has been a victim of a canard that agricultural produce from the state is filled with fertiliser and pesticide residues. Punjab Agricultural University (PAU) conducted a study for the decade 1990-2000 in which it collected 1200 samples of vegetable horticulture produce. It found 92% of the samples to be contaminated, and 44% of those were above the Maximum Residue Level (MRL). A similar study was conducted from after 2000 to 2019. In this study, 92% of the samples were found to be free from any contaminants. Only 1.3% of the samples had an MRL value greater than the permissible limit.

Hence, unlike the global perception, crops from Punjab are of a global hygiene standard. It is even more interesting to note that Jammu and Kashmir is the state which uses the highest amount of pesticides/fertilisers per unit crop area, that is, 1.89 kgs per hectare. Punjab, on the contrary, uses a mere 740 grams of fertiliser or pesticide per hectare of crop. This makes Punjab a competent exporting state.

Talking on Punjab’s export potential, N.S. Dhillon, Punjab’s sole frozen vegetable exporter to Japan, said that “Punjab produces broccoli, seed potatoes and several other vegetables. All of these are of a high hygienic standard, but Punjab’s perception in the global market stops us from growing. I have exported 300 tonnes of frozen broccoli to Japan annually. Why can’t this be done with the UK? Another crop is that of seed potato, which has a very strong international demand. Currently, Punjab’s seed potato produce goes to West Bengal, but it doesn’t cross the border into Bangladesh. Punjab has the potential to become the seed potato supplier of the world.”

Punjab’s Competitive Advantages

Punjab’s competitive advantage also arises from the climate of the state. The UK grows the majority of its crops in summer as their winters are very  harsh. UK’s summer crops are highly vulnerable to diseases and pests, which forces them to use heavy amounts of chemicals. During winters, the UK relies majorly on food imported from nearby markets. Punjab’s winter crops require very few chemicals as the temperature does not allow pest infestation in winter but supports crop growth. Hence, Punjab’s winter crops have a huge scope of export to the UK. Punjab harvests winter crops around November end and hence can supply the produce to the UK in their winter months.

Another factor making the UK an attractive export destination for Punjab is the large population of the Indian diaspora. Indian vegetables are mostly exported for the Indian diaspora. The Indian community is the largest diaspora in the UK. The dietary habits of this diaspora are very similar to the dietary habits of their relatives in India. African nations have become the biggest suppliers of vegetables like bitter-gourd and several other types of gourds. These vegetables are largely consumed by the Indian diaspora living in the UK. This shows that there is a market ready to be exploited.

According to PwC’s “Study on identification of export oriented integrated infrastructure for Agri products from Punjab, Haryana & Himachal Pradesh”, the districts which are worst affected by groundwater decline, are actually the districts most favourable for the sowing of peas and potatoes (refer to maps). This shows promise as, if the cropping pattern of these districts changes then groundwater decline can be tackled substantially.

The highlighted districts in Punjab are the most suitable districts to grow potatoes according to a PwC’s study.
The highlighted districts in Punjab are the most suitable districts to grow potatoes according to a PwC’s study.
The highlighted districts in Punjab are the most suitable districts to grow peas according to a PwC’s study.

The Impediments To Growth

Almost a decade ago, agricultural scientists from Punjab were sent to Kenya to train the local people on horticulture production. As of today, Kenya is one of the largest vegetable suppliers to the UK. Another instance is of chilli seeds. Farmers use the chilli seeds from Punjab to grow the crop in Italy only to export it to the UK.

Punjab has the potential to do this directly, but there are certain hurdles to be crossed. Firstly, Punjab being a landlocked state, has a very poor air logistic connectivity. The Chandigarh airport has only two international flights of which none lands at Europe. The Amritsar airport has only one operational flight to Birmingham which used to transport vegetables to the UK, but it is no more the case.

Air logistics are necessary for vegetable exports due to the short shelf life of fresh vegetables. This is the area where Kenya focused and developed a strong air logistics chain. The air travel time from Kenya to UK is the same as that from Amritsar to UK. If Punjab has to truly diversify its crop and maintain agriculture as a remunerative activity for the future, then the development of strong air logistics is imperative.

Another impediment is the cost of existing air logistics. In 2014, the cost to transport increased from ₹70 per kg to ₹120 per kg. Vegetable exporters from Punjab take this price as a huge hurdle to do business as it makes the exports unviable. Another issue is the lack of functioning perishable cargo centres. The state also needs a wider presence of packaging centres.

Since infrastructure for a seamless export of fresh vegetables is absent in the state, the best route to take Punjab’s vegetable produce to the international market is by focusing on processed vegetables. Processed vegetables include several items like tomato puree, frozen peas, frozen potatoes like French fries, et cetera. Punjab can capitalise on its vegetable producing districts and increase the production to export processed vegetables. But there is also a need to create a larger chain of refrigerated transport and storage facilities. Currently, Punjabi exporters need to approach Dadri in Haryana for refrigerated transport containers.

According to Ankush Agarwal, a large scale vegetable exporter from Punjab, “If Punjab has to produce vegetables, then the future lies in processed vegetables. That would be possible only if we achieve an economy of scale. Vegetables in Punjab are not produced as a captive product while the African nations produce vegetables specifically for exports. We need to bring a behavioural change in Punjab’s farmers to shift from water-intensive wheat and paddy. The government has to act as a strong pillar of support if Punjab decides to export at a large-scale. The issue of logistic support stymies progress in this area, but the government certainly has the wherewithal to resolve it.”

Uncertainty Ahead

Brexit is a reality. The event of a hard or soft Brexit is yet to happen. The UK is looking ahead at an early General Election, a delayed Brexit and a continued confusion on a deal or No-Deal. This generates uncertainty. Even if the UK manages to avoid a hard Brexit, Punjab has a strong opportunity to export its vegetables. The UK is not the only market in the world. It is a prospective market with a strong presence of Indian diaspora. Indian diaspora is not limited to the UK only. The middle eastern countries already have strong trade ties with India along with a huge presence of Indian diaspora. Punjab can improve upon its logistic facilities to cater to the global demand of Indian vegetables.

The Indian government needs to act as a facilitator by keeping in mind the export potential of states like Punjab. The signing of a trade agreement with the UK will benefit India as a country, but this can also lead to a transformation of Punjab to a major vegetable exporting state. This will ease the burden on the groundwater resources of the state and will also make agriculture lucrative for farmers. Crop diversification is the need for Punjab, and it can only be realised if the farmers see a viable market for crops other than wheat and paddy.

Domestic markets in India have frequently disappointed vegetable growers due to price instability. Furthermore, vegetables have been perceived as a crop which is sown for the domestic demand. If farmers are educated to grow vegetables which can be later produced within the state, then the value addition to vegetables will give the farmers of Punjab enough incentive to shift from wheat and rice to vegetables. But this can fructify if the state supports strong air logistics infrastructure.

With sea routes being very distant from the state, air connectivity stands as the only hope for Punjab to revive itself in the agriculture sector. The state government, along with the Government of India, needs to collaborate to make Punjab’s agriculture resilient to changes of the climate and consumerism. Otherwise, the present indicators explicitly point towards large scale desertification of the state. It is now upon the government to act as a facilitator to link Punjab’s farmer to the world in a sustainable manner.

Created by Angad Brar

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